Solar Tariff Irony
What You Need to Know about Subsidized Solar Panels
This afternoon, after months of annoying legalese and empty rhetoric, it was announced that the U.S. would impose import fees on solar panels produced in China.
I've sounded off about this before, so I'll keep my rants to a minimum.
But I would like to point out that the single company that decided to basically launch a trade war against China, claiming unfair government support, is a company that exists today thanks to hundreds of millions of dollars in subsidies.
Ironic, huh?
I've been banging my head against a wall for months over this debacle. How this case got so far is still beyond me. Of course the Chinese government heavily subsidizes its solar industry. Just like the U.S. heavily subsidizes its oil and gas industry. But I don't see these guys rushing to demand fairness from domestic oil & gas producers.
Bottom line is this boils down to little more than sour grapes. The Chinese are dominating, and companies like SolarWorld, because of their inability to keep up, are looking to pin the blame on China.
And I'm not the only one who sees it this way.
On Monday, just one day before the tariff decision was announced, the Coalition for American Solar Manufacturing put out an eye-opening press release that I encourage you to read here:
On the eve of a preliminary decision by the U.S. Department of Commerce on whether to impose anti-subsidy tariffs against Chinese imports of solar cells, the Coalition for Affordable Solar Energy (CASE) is calling on all seven members of the Coalition for American Solar Manufacturing (CASM), including the four remaining anonymous companies, to disclose a complete list of the government (state, federal and foreign) subsidies they have received over the past decade.
“SolarWorld and CASM members claim that this entire debate is about fairness. As such, we expect that they will release a complete outline of the hundreds of millions of dollars in government support they have received in countries like Germany, Italy, Qatar and the United States,” said Jigar Shah, President of CASE. “Unfortunately, the U.S. Department of Commerce does not consider the hypocrisy of the petitioner or make a comparative evaluation. However, given the damaging nature of CASM’s crusade, the public deserves to know the truth about SolarWorld and the millions of dollars it has received in supply-side government subsidies.”
According to public information, SolarWorld alone has received more than one hundred million dollars in direct supply-side subsidies that give the German company a competitive advantage. Although incomplete, here are some of the subsidies provided SolarWorld:
- According to Handelsblatt, a German publication, SolarWorld has received 130 million Euros in direct subsidies in Germany between 2003 and 2011.
- According to the Portland Tribune, SolarWorld received a US$11 million Business Energy Tax Credit in Oregon that it immediately sold to Wal-Mart for US$7.3 million in 2009. It then applied for a second round of tax credits and received an additional US$19.4 million.
- According the U.S. Department of Energy, SolarWorld was “awarded a clean energy manufacturing tax credit of $82.2 million to expand its existing 100 MW solar photovoltaic manufacturing plant to 500 MW.”
- According to PV Tech, a leading solar industry publication, SolarWorld received around US$19 million in preferential export financing for projects in India.
- According to a SolarWorld press release, SolarWorld has entered a joint-venture partnership with the Qatar Development Bank, a Qatar government-backed investment bank, for the construction of polysilicon facility in Qatar.
- According to The New York Times, quoting a SolarWorld executive, the company “was in the process of obtaining US$4 million in research assistance from the federal government.”
- As a corporate resident in the Hillsboro Enterprise Zone, SolarWorld is entitled to a 100% property tax abatement for up to five years.
“It’s clear that SolarWorld is one of the most heavily-subsidized companies in the history of the solar industry,” said Jigar Shah, President of CASE. “If their crusade is truly about fairness, we urge them to release a detailed list of all the subsidies and tax breaks they have received globally.”
SolarWorld is not the only CASM member to receive preferential government treatment, according to public records. MX Solar, a Milan-based solar manufacturer, received government incentives for its 50MW manufacturing facility in New Jersey. According to a September 2011 presentation by The State of New Jersey, MX Solar was approved for US$3.3 million in subsidies under the state’s Clean Energy Manufacturing Fund. In addition the New Jersey Economic Development Authority’s Business Employment Incentive committed a broad range of financial incentives for the deal, and the company benefits from local content requirements in its home market, Italy, that exclude American products.
The third public CASM member, Milwaukee-based Helios Solar Works, has also received supply-side government subsidies, according to public sources. Helios received a US$1.4 million loan from the Recovery Act funds from the Energy Department’s State Energy Program (SEP), which supports 26 jobs as of December 2011.
“It’s incredibly disturbing that such highly-subsidized companies can start a global trade war and damage the entire U.S. solar industry and threaten tens of thousands of American jobs by accusing their competitors of receiving subsidies. A war over subsidies in the solar industry is like a circular firing squad where everyone gets hurt,” added Shah.